The incident came to light after a lady teacher of the school lodged a compliant to a local government official.
According to police, the headmaster and two employees reportedly raped the Class 7 and 8 students for months.
Police said, "An FIR was registered against headmaster Pradipta Sahu, assistant teacher Iswar Bhotra and cook Padman Bhotra and they were arrested."
The girls were studying at the Boda-Amada Sevashrama School in Koshamguda block, nearly 550 km from Bhubaneshwar.
Orissa's Mass Education minister Pratap Jena has asked the district collector to conduct an inquiry and submit a report to him.
The four victims have been sent to a local hospital for medical examination.